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Business Term Loan:

Scenario: Expanding a Manufacturing Business Imagine a manufacturing company that wants to expand its production capacity by purchasing new machinery. The business decides to apply for a business term loan to acquire the equipment. The lender approves a loan with a fixed interest rate and a repayment period of five years. The company makes regular monthly payments to repay the principal amount along with interest. This type of loan provides the company with the necessary funds to grow its operations without affecting day-to-day cash flow.

Commercial Property Loan:

Scenario: Purchasing a Retail Space A retail business that has been leasing its storefront decides to buy a commercial property instead. The business applies for a commercial property loan to finance the purchase. The property serves as collateral, and the loan is repaid over a more extended period, such as 15 or 20 years. This type of loan allows the business to build equity in the property and potentially benefit from property value appreciation over time.

Equipment Finance:

Scenario: Upgrading Company Vehicles A logistics company needs to upgrade its fleet of delivery vehicles. Instead of making a significant upfront payment, the company opts for equipment financing. The lender provides funds for the purchase of new vehicles, and the company repays the loan through regular installments. The vehicles themselves may serve as collateral, and the financing structure may involve a chattel mortgage, providing flexibility for ownership at the end of the term.

Working Capital Loan:

Scenario: Managing Seasonal Fluctuations A retail business experiences seasonal fluctuations in cash flow, with increased sales during certain months. To manage inventory and meet increased demand, the business applies for a working capital loan. The loan provides the necessary funds to purchase additional inventory, and the business repays the loan as sales increase during the busy season. This helps the business maintain smooth operations without straining its cash flow.

Invoice Financing:

Scenario: Improving Cash Flow from Outstanding Invoices A small consulting firm has completed several projects for clients but is facing cash flow challenges due to delayed invoice payments. The firm decides to use invoice financing to get immediate access to cash. The finance provider purchases the outstanding invoices at a discount, providing the firm with the necessary funds to cover operating expenses. Once the clients pay their invoices, the finance provider receives the full amount, minus the discount.

Line of Credit:

Scenario: Managing Short-Term Cash Flow Gaps A retail business faces occasional short-term cash flow gaps, especially during slow seasons. The business establishes a line of credit with a bank. When facing a temporary cash crunch, the business can draw funds from the line of credit, up to the approved limit. Interest is only charged on the amount used, providing flexibility to address immediate financial needs without a long-term commitment.

These scenarios illustrate how different types of commercial loans in Australia can be tailored to meet specific business needs, whether it’s funding expansion, managing cash flow, acquiring assets, or navigating seasonal fluctuations. Businesses should carefully evaluate their circumstances and work with financial professionals to choose the most suitable financing option.

While there is no definitive answer to this question as everyone has different requirements. However, to get an accurate representation of how much you will be able to borrow, check out our Borrowing Power Calculator. We recommend you give us a call on 130000RYRO so that we can provide you with an absolute number depending on your requirements and circumstances.

There are plenty of loan options in the market, and our mortgage brokers will ensure you get the one that is the best fit for your circumstances.

Typically for a first home buyer, deposit ranges from 5% to 10% of a property’s value. However, it will depend on your home loan and the lender you select. To know more, give us a call, and we’ll be glad to help.

FHOG is available to all Australian residents and citizens who are buying or building their first home. Conditions for this grant is different in every state. To know more about this scheme and check if you are eligible, you can contact us.

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